Sector Investing

[ReturntoSender]

From Briefing.com: 4:20 pm : Equities got off to a slow start as the major averages showed indecision in the early going. After chopping around the flat line during the first hour of trade, the key indices reached their session highs at the midway point. Unable to hold those levels, stocks returned to the middle of the day's range before buyers re-emerged in the final hour. As a result, the S&P 500 added 0.4%.

The consumer discretionary sector led the way as a handful of names outperformed. Family Dollar (FDO 68.56, +2.56) gained 3.9% after reporting in-line earnings and revenues. The management also issued mixed guidance as it sees weaker first quarter results and full-year earnings which are expected to be in-line with estimates.

Online video rental service Netflix (NFLX 62.58, +6.12) jumped 10.8% after Citigroup pointed to a survey which showed an improvement in customer satisfaction.

Elsewhere, DineEquity (DIN 58.40, +1.87) rose by 3.3% after Janney Montgomery Scott upgraded the shares of the restaurant operator from ‘neutral' to ‘buy.'

Homebuilder stocks showed broad strength as the SPDR S&P Homebuilders ETF (XHB 25.38, +0.55) settled higher by 2.2%. Within the group, Standard Pacific (SPF 7.17, +0.60) was the top performer as shares of the homebuilder spiked 9.1%.

The Dow Jones Transportation Average added 1.2% as the vast majority of its components displayed strength. Railroads, CSX (CSX 21.18, +0.48) and Norfolk Southern (NSC 65.60, +0.58) advanced 2.3% and 0.9% respectively after Lazard upgraded the two stocks from ‘underperform' to ‘market perform.'

Airline stocks were broadly higher after a handful of carriers reported positive monthly metrics. In addition, significant weakness in crude oil may have contributed to airline strength. United Continental (UAL 21.14, +1.20) jumped 6.0%, while Delta Airlines (DAL 10.16, +0.39) and Southwest Airlines (LUV 9.14, +0.16) gained 4.0% and 1.8%, respectively.

The financial sector outperformed the broader market, and the SPDR Financial Select Sector ETF (XLF 15.83, +0.14) settled higher by 0.9%. Bank of America (BAC 9.11, +0.18), Citigroup (C 34.06, +0.80), and Wells Fargo (WFC 35.44, +0.62) were the top performing majors as they registered gains between 1.8% and 2.4%.

Elsewhere, Ocwen Financial (OCN 34.88, +5.92) spiked 20.4% after the company announced the acquisition of Homeward Residential from WL Ross & Company for $588 million in cash and $162 million in convertible preferred stock.

MetroPCS (PCS 12.24, -1.33) fell 9.8% after the company confirmed its merger with T-Mobile USA. In addition, PCS announced the plans for a 1-for-2 reverse stock split. Prior to the reverse split, the company will make a cash payment of $1.5 billion—or $4.09 per share—to its shareholders.

Sarepta Therapeutics (SRPT 44.93, +29.94) soared 199.7% after announcing its eteplirsen met the primary endpoints of a trial while achieving significant clinical benefit on a 6-minute walk test. The positive results came after 48 weeks of treatment in phase IIb study focused on patients with duchenne muscular dystrophy.

Crude oil extended yesterday's losses despite inventory data that showed a draw of 0.482 million barrels when a build of 1.5 million was anticipated. Although there wasn't any one item to point to for the weakness, contributing factors included a stronger dollar, reports about the highest crude output levels since December of 1996, and weak economic reports out of Europe and China which signaled demand concerns. The energy component fell off its session high of $90.67 per barrel, and brushed a session low of $87.96 moments before it settled with a 4.0% loss at $88.20.

The September ISM Non-manufacturing Index was reported at 55.1, which was above the 53.0 Briefing.com consensus, and up from August's 53.7 reading.

According to today's ADP National Employment Report, employment in the nonfarm private business sector rose by 162K in September. This was above the 133K increase expected by Briefing.com consensus. In addition, the prior month's increase was revised down by 17k, to reflect an addition of 156k jobs.

In tomorrow's economic releases, Challenger Job Cuts will be reported at 7:30 ET. Initial and continuing claims will hit the wires at 8:30 ET, while factory orders will be released at 10:00 ET. In addition, the Federal Reserve will release the minutes from its September 12 Federal Open Market Committee meeting. Also of note, retailers will release their monthly comparable store sales reports.

Overseas, the Bank of England and the European Central Bank will hold policy meetings.DJ30 +12.25 NASDAQ +15.19 SP500 +5.24 NASDAQ Adv/Vol/Dec 1131/1.63 bln/1315 NYSE Adv/Vol/Dec 1499/666.0 mln/1512

3:35 pm : Crude oil extended yesterday's losses despite inventory data that showed a draw of 0.482 mln barrels when a build of 1.5 mln barrels was anticipated. Although there wasn't any one item to point to for the weakness, contributing factors include a stronger dollar, reports about the highest crude output levels since December of 1996, along with weak economic reports out of Europe and China, which signaled demand concerns. The energy component fell off its floor session high of $90.67 per barrel and brushed a session low of $87.96 per barrel moments before it settled with a 4.0% loss at $88.20 per barrel.

Natural gas trended lower for most of its floor session after falling off its session high of $3.45 per MMBtu. It tumbled to a session low of $3.35 per MMBtu and eventually settled for a 4.0% loss at $3.39 per MMBtu.

Gold traded in positive territory despite an advance by the dollar as both ADP Employment Change and ISM Services data beat expectations. The yellow metal popped to a pit session high of $1784.00 per ounce moments after floor trade opened and settled into a fairly consolidative pattern near the $1781.00 per ounce level by afternoon action. It inched slightly lower as it headed into the close and settled the session with a 0.2% gain at $1779.90 per ounce.

Silver also rallied to a session high of $34.93 per ounce right off the pit open but was unable to hold the momentum. It eventually gave up all of its gains and closed flat at $34.67 per ounce.DJ30 +6.64 NASDAQ +12.65 SP500 +4.16 NASDAQ Adv/Vol/Dec 1139/1376.0 mln/1299 NYSE Adv/Vol/Dec 1432/436 mln/1560

4:45PM Mattson Appoints J. Michael Dodson COO and CFO; announces details of cost-reduction program (MTSN) 0.93 -0.03 : Co appointed J. Michael Dodson, 51, as chief operating officer (COO) in addition to his existing duties as chief financial officer (CFO). Dodson joined Mattson Technology as executive vice president and CFO in October 2011.

Co also announced the plans for finalization of Phase III of its cost-reduction program, which entails a broader reduction in force and the consolidation of all of its manufacturing operations to the corporate headquarters in Fremont, California. The total estimated reduction in annual operating expenses for all three phases of the program is over $20 million. Combined with the ongoing gross margin improvement efforts, the Company's cash flow breakeven point is expected to be reduced to the low $30 million quarterly net sales level by the end of 2012.

4:05PM Integrated Device announces extension of exchange offer expiration date in PLX Technology Transaction (PLXT) (IDTI) 5.79 +0.01 : Co announced that it is extending the expiration date of its exchange offer for all outstanding shares of common stock of PLX Technology (PLXT). The exchange offer was previously scheduled to expire at the end of the day on October 4, 2012.

4:04PM O2Micro lowers Q3 rev guidance on broad-based weakness in co's end markets (OIIM) 3.78 -0.05 : Co issues downside guidance for Q3 (Sep), lowers Q3 (Sep) revs to $22-23 mln from $24.1-26.0 mln vs. $24.92 mln Capital IQ Consensus. In addition, gross margin for Q3 is now expected to be 54.5% to 55.5%. The reduction in anticipated revenue is primarily the result of broad-based weakness in demand in the co's end markets. "O2Micro continues to navigate through broad-based lower demand in all of our end markets. We believe this is the result of weak global economic conditions, coupled with excess inventory corrections by our customers. Additional information will be available when the Company reports its third quarter 2012 results prior to market open on October 31, 2012.

2:38PM Hewlett-Packard: HPQ -11% into the lowest price levels (15.15) seen since Apr. 2003 (HPQ) 15.26 -1.87 :

Kulicke & Soffa Industries (KLIC) announced the appointment of Mui Sung Yeo to its Board of Directors. In addition, Ms. Yeo will serve on the co's Audit Committee.

Integrated Silicon Solution (ISSI) announced it has begun sampling production units of its new 1Gigabit and 2 Gigabit DDR3 devices, the first of ISSI's family of DDR3 SDRAMs.

IBM (IBM) unveiled new technologies designed to help organizations with improved security, the ability to take advantage of cloud computing, and the requirement to manage and analyze vast amounts of data. The new offerings include the most powerful enterprise Power Systems to date, a new high-end disk storage system and key software updates for IBM's newest mainframe computer.

10:51 am S&P Information Technology Index trading higher today and ahead of overalll market

The tech sector is trading higher today, just ahead of gains in the broader market. Semiconductors are showing relative weakness, however, with the SOX trading 0.1% lower. Within the chip index, MKSI (-1.4%) is a notable laggard. Among other major indices, the SPY is trading 0.2% higher today, while the QQQ is up 0.4% and the NASDAQ is trading 0.3% higher on the session. Among tech bellwethers, MSFT (+0.9%) is showing strength, while TXN (-0.6%) is under pressure. In tech earnings, XRTX (-13.7%) posted a Q3 miss and guided Q4 well below consensus. XRTX customer NTAP (-2.3%) is trading lower in sympathy. Also, FIRE (-2.9%) preannounced upside Q3 guidance. In news, FIRE (-2.9%) announced the resignation of its CEO, who was on medical leave. This morning, PCS (-5.8%) confirmed its merger with DTEGY (+1.0%). Among rumors, AAPL (+0.8%) has begun production on its new mini iPad, which it could unveil on October 10th, according to reports. Also, we are hearing AAPL (+0.8%) for P (+1.3%) making the rounds.

In notable analyst upgrades this morning in the tech space, SMTC (+3.3%) was upgraded to Buy at Lazard. Among downgrades, TXN (-0.3%) was downgraded to Sector Perform at Pacific Crest and BofA/Merril downgraded CBEY (-4.3%) to Underperform. There are no notable names in tech scheduled to report quarterly results today after the close.